CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Crypto-Settled Derivatives Markets Have Continued To Grow In Popularity - According To Some Data, Several Well-Known Players Are Beginning To Pose Legitimate Challenges To BitMEX
Volumes on crypto-settled derivatives markets, primarily denominated in bitcoin, continue to grow. In the last two-years, BitMEX has set itself apart as the clear number 1 and in many cases created a model for copy-cat adoption. In posting daily volumes that have topped well over USD 10B a slew of other platforms have entered the fray and many of the world's largest spot exchanges now have some exposure to crypto-settled derivatives. In using the last 24-hours as a proxy, crypto-data platform Skew reports USD 3.2B equivalent of futures volume on BitMEX but also ~2B for Huobi, ~1B for bitFlyer and ~500M for CoinFlex (chart). Binance, which only launched their derivatives platform earlier in the month, is reported at USD 440M equivalent.
Crypto Takeaway: Crypto-settled derivatives are now responsible for considerably more liquidity than spot markets. That said, using traditional markets as a proxy, there is still plenty more growth available. Many of these crypto-platforms are restrictive to some of the largest money managers. In almost every case, such products restrict the US, among other regions and, due to their crypto-settled nature, restrict the many funds which do not have offering memorandums that allow participation in physical crypto. Furthermore, with items such as 'leaderboards,' little in terms of high-touch sales coverage and embedded open chat forums (i.e 'trollboxes'), they are far from delivering an 'institutional experience.' Ultimately, we have maintained that licensed cash-settled derivatives remain the most compelling opportunity in the space with the best chance of pulling these money managers off the sidelines.